Toronto, Ont – The changes announced today to Ontario’s electric vehicle incentive program include some positive steps. It makes sense to offer incentives to hydrogen-powered vehicles, to link incentives to vehicle range, and to make it more affordable for people to install charging stations at their homes. But the move to eliminate subsidies for electric vehicles that retail for over $75,000 is a mistake.

2017 was a record-breaking year for EV sales in Ontario. It was the first year that more EVs were sold in Ontario than any other province. EV sales in Ontario in 2017 were up by 120 per cent over 2016 – which would seem to indicate that the incentives are working.

A significant number of the electric cars sold in Ontario retailed for over $75,000 – and so would no longer be eligible for the incentives. Removing the incentives will almost certainly have a negative impact on sales and make it more difficult for Ontario to reach its EV sales target. Shifting more Ontarians to EVs is a critical strategy for reducing greenhouse gas (GHG) emissions from transportation – the largest source of carbon pollution in Ontario. Considering the potential impact on EV sales, a clearer rationale and careful analysis are needed to justify this action, showing the potential GHG emissions’ impact of eliminating incentives for these models against the cost of incentives.

Ontario opted for a voluntary program over a zero-emissions vehicle mandate, despite the fact that mandates are the strongest policy tool governments have to encourage the shift to electric cars. The removal of subsidies further weakens Ontario’s EV support by shutting higher end vehicles out of the voluntary program – despite the fact that these vehicles occupy a significant share of Ontario’s EV market.

EV prices are coming down. In the coming years, consumers will be able to choose from a variety of more moderately priced zero-emissions vehicles. But today, the supply of clean cars is still constrained, and subsidies are still needed to encourage a massive shift in how we get around. It doesn’t make sense to shut any vehicles out of the incentive program until this shift is well underway.

Evidence from around the world has shown that subsidies work. While they won’t be needed forever, they are needed for now. And importantly in Ontario, EV subsidies are funded from cap-and-trade, meaning that taxpayers are not on the hook.

If Ontario is keen to act on subsidies, we suggest the province move to axe the hundreds of millions of dollars spent each year to support fossil fuel use – subsidies which directly undermine its own climate policy.